and 2, give you some idea of what that retro fit might look like. and third, evaluation and design to help you determine the retro fit requirement. >> well kelly, i can't thank you enough for being here today. thank you so much for your wealth of information on how we can take care of our soft story problem in san francisco. and you the viewer, if you have any questions, please feel free to visit our website >> supervisor cohen: looks like we are ready to go.

>> clerk: okay. yes, we're ready. >> supervisor cohen: all right. ladies and gentlemen, i want to welcome you back to the budget and finance committee. i want to thank our friends at sfgovtv with assisting us with today kazz broadcast. our clerk is mr. victor young. to my far right is supervisor she heavy, to my right is supervisor -- and bringing up the far left is supervisor yee. mr. clerk, are there any announcements? >> clerk: yes. please make sure to silence all cell phones and electronic devices. items acted upon today will appear on the june 5 board of supervisors agenda unless otherwise stated. >> supervisor cohen: all right. thank you very much. so colleagues, i want to thank everyone that's in the chamber with us today, not just my colleagues but the department heads and staff and members of the public. today marks the first hearing of what we will call the may 1

budget, which is 12 departments whose budgets are released in may, many of which are revenue generating and rely less on the general fund than do -- less on the general fund than the may -- excuse me, than the june 1st budget. so in these hearings, i hope to shed some light on what our departments are spending money on, both from a policy perspective, looking at capital improvements and how many people -- how many people they are hiring. today, we have a -- today -- today, we will have first round presentations from these departments. next week, we will hear reports on these same departments from the budget and legislative analysts who may recommend changes to their budget, so again, just to recap, we're going to hear from departments today, next week, we'll hear from the bla, so we're not going to hear back from the bla reporting back to us this week.

there will be a public comment at the end of the department hearings. i've asked each department to keep focused on strategic remit, service changes and to focus on significant changes from last year's budgets. again, i've asked their presentations to be no longer than ten minutes. again, i'll begin with the airport. >> clerk: madam chair, may i read the items? >> supervisor cohen: yes, please. could you please call item numbers one, two, and three together. [agenda items read ]

>> supervisor cohen: all right. thank you very much. i will read the order of the departments that will be presented. first we will hear from the san francisco international airport, followed by the library, department of the environment, san francisco employee retirement system, the rent board, building inspection, and the san francisco unified school district -- excuse me, i'm sorry. the san francisco international airport, the port of san francisco, sf library, mta, child services, the law library, rent board, appeals

board, inspections, puc, and then will be the san francisco unified school district, particularly the transfer. so first, we will start with mr. sativar. >> good morning, madam chair. thank you. thank you for the opportunity to present the 2019 budget. our airport, we continue to service the community and our strategic plan and our budget priorities closely align. we continue to be well supported by our core values and in particular, safety and security continues to be our top priority. as i said, our budget is in strong alignment with our strategic plan, and it's in strong alignment with the growth we've experienced recently. we continue to see strong growth, and since 2008, sfo has been the fastest growing hub in the u.s., and last year was another record breaking year

where we achieved 54 million passengers, which was an increase over the entire year. if you look at the chart, we've consistently exceeded our expectations. this success created some very positive outcomes for the airport as well, and as a result, the budget focuses on ensuring we're continuing to allow for this growth while still providing an exceptional level of passenger experience. as you can see, we continue to see strong demand at sfo, we have significant new carrier destinations as well as route expansions and that's helping to boost our competitive advantage with the airports that we do compete, particularly in the international market. you can see that the slide shows for fiscal year '18 and '19, we anticipate 17 new daily flights to 16 new domestic

destinations and 13 new daily flights to 13 international destinations. and so in sum total, by the end of the year, we anticipate 657 average daily departures to a total of 133 destinations. as you know, alaska acquired virgin america, and they've shown a strong desire to build their presence on the west coast with this purchase. they are now a 13% airline at sfo, and we see increased competition in the markets that they fly, airlines adding service, which is a great thing for our growth as well as a great thing for the traveling public in terms of fair competition. and with this growth, we're seeing significant increased revenues, and as you see in the revenue chart, we combine airline and nonairline revenues, and we see that growth rate at about 7% average over the past five years.

we continue to focus on maximizing nonairline revenues. this is a very important part of our structure in that it helps diversify our revenue base and helps us be cost competitive for the airlines, and that 15% of concessions and ground transportation revenues are contributed to the city for services each year. and i'll just highlight the annual service payment and how that's grown over time. you will -- this year's anticipated payment will be 45.6 million. it has tempered a bit as a result of our construction program, our $7.2 billion construction program, and what that has impacted is the number of food and beverage concessions and retail service which was reduced revenues to an extent. we will see this as well, not

quite the consistent growth that we've seen in the past, but in 2020, that will catch up as all of our food and beverage and retail operations come on-line as our capital plan subsides, so we anticipate to go up to 155 concession leases in 2020, including our new duty free lease. our budget is focused to allow for continued to growth, and with this growth we do see constraints in existing operations and our facilities. as a result we continue to focus on these growth related needs. and just to highlight a few of those, safety and security is, again, our highest priority and our initiative is around increasing the increased visible police presence at sfo. our capital plan is in full stream ahead mode, and the debt service that accompanies that

capital program. we are also focused on meeting passenger plans in terms of gate availability, terminal cleanliness, that passenger experience piece, and, for example, this year, we have ramp operations which allow us to continue to accommodate that growth. we're also prioritizing efforts around traffic congestion and curbside congestion, and so we have initiatives to deal with the tnc operations that have become so prevalent in our operation. one out of every two vehicles at sfo is an uber or a lyft or a wings vehicle, so we have plans around reducing and mitigating curb side stablt. and achieving net zero energy, zero emissions and zero ghg emissions. so related to our proposed two-year budget, and it is fully supported by airline revenues, if we could focus on the first line, our proposed

budget for '18-'19 is 1.16 billion. this is a 10.7 increase over last year, and that increase is associated with the debt service on the capital improvement program, the wage, benefits and cola increases, contractual services, such as air trained service and parking management services, as well as this police initiative on visible presence. and then our proposed but jet for the following year is 1. -- budget for the following year is 1.1, and this is related to debt service on the capital program as well as that increased police presence initiative. and related to police presence and the budget we've established for that, we're focused on funding for police academy classes over the next two years and increasing our

police count up to 287 officers -- uniformed officers. that is based on a baseline study we did on law enforcement needs from starting from a zero base and then building up from that, and that's how we got to that number. also, in the budget table, you'll see that over time, it's increasing slightly. this is related to anticipated emergency maintenance staff response as well as communications and dispatch over time that we anticipate to support air field operations. and then, a restatement of our annual service payment line, and then, at the bottom, you'll see the operating positions, and we're increasing the count -- proposing to increase the count by 12 positions next year, and then remain flat in the following year. >> supervisor cohen: i just want to bring to your attention, you have two more

minutes. >> okay. thank you. capital improvement program continues to do well. we've completed 1.6 billion of work, and this is focused on terminal redevelopment to improve the seismic safety of the facilities as well as provide for that customer experience. the airport hotel is a key initiative of this as well as our shoreline protection program, and then, we have some other programs related to security, infrastructure, long-term parking, air train extension and additional gate enhancements. next slide is around our job training program. we're very pleased with the success of our programs, we have two that target at risk youth. career connect is an important program and our college intern program. last year in total, we had a total of 180 interns, and this year, we anticipate to bring in about 197. we also have two new training programs around the hotel hiring as well as working with city build on a steel

worker-ironworker training. and then, related to permanent jobs, we're pleased with that work we do. we've been partnering with the bay area counsel on hosting job fares. we achieved a 38% -- 39% local hire rates, and this year, we're about 627 local hire. and then, around small and local business, that continues to be an important part of our success and the passenger experience. we are, i think, doing well in the construction program. we're at about 18.5% lbe participation with $292 million in work, and then 72% of our concession revenues was earned by local businesses. and then, you can see some of our key policy initiatives for this coming several years. i just put those in there

around wages around curb side congestion, around technology improvements, sustainability and aircraft noise, things that are key to the airport and to the community. thank you. >> supervisor cohen: thank you. quick question. i want you to go back to explaining a little bit what drives the increased need for police officers, and you said that you were supporting the one police class. is that what you said? >> we are proposing to pay for four academy classes over the next two years. >> supervisor cohen: so i'm a little bit confused how that will work. i understand that draws down from the general fund, so would you be contributing moneys to go towards a police academy? >> what we do now is based on our mou we pay a share of academy based on the number of recruits and positions.

but we worked with the police on having dedicated airport classes that we would pay for in full. >> supervisor cohen: i understand. and so there are approximately 80 officers in training that will be on the street in september. are you not able to access those newly trained officers? >> maybe i can ask the chief schmidt to answer that. >> good morning. so the -- the classes that are currently in are general fund classes. when the airport works with the chief, they -- and with your approval, set aside money to fund classes. once those classes start, and they complete the training, at that point, the chief transfers members down to the airport and then, the money's transferred -- >> supervisor cohen: so as of right now, the officers that are going through training cannot do performed duties at the airport. >> that's correct. >> supervisor cohen: okay.

so that's a special training. how do you -- >> well, any officer that's transferred to the airport get special training, but none of the positions that are training in the city are not designated airport positions. they are not funded by the airport, they're general fund. >> supervisor cohen: i know, but the airport can transfer some money to the general fund to pay for some of those officers. i'm just trying to think of the most efficient way to get the airport the officers that they need. it sounds like there's not an immediate demand for it, it's that you plan to have it in the future. >> right. this represents the planning for the next two years so the airport can fit them in. >> supervisor cohen: okay. thank you very much. so i guess maybe you can tell me some of the qualitative needs that you see in your desire -- in your desire to seeing more officers at the airport. >> sure. glad to.

you know, we have four terminals, and with global events and terrorist threats, and airports becoming a desirable target, you know, my feeling is the visible presence is the most important part to protecting the public. and when you think about airports, there are vulnerablities in the ticketing halls, and in the checkpoint, places that people cue that it's very important to have that visible presence, the ability to respond, and we've seen that in recent events in florida and l.a. so this is that initiative to build up the visible presence but then also enhance the perimeter of the airport and have more folks in cars on the air field. >> supervisor cohen: have you reached out to homeland security? are there any federal dollars to assist with the ramping up of the police at the airport? >> i have not. i will reach out to them and ask that question cone cone

'cause it seems that the airport would be in their purview of interest when it comes to homeland security. >> yes. thank you. >> supervisor cohen: so real quick. and how many officers are you looking to add to -- to the airport? >> about 100 over the next two years. >> supervisor cohen: and how many do you have now? >> 180 total uniformed, thereabouts, and we have police service aides, as well. >> supervisor cohen: so you're looking to get 280 total. >> am. >> supervisor cohen: so a 24-7 cycle? >> yes, ma'am, it's the 24-7 cycle. >> supervisor cohen: and i believe chief schmidt said the officers receive some sort of specialized training of some sort? >> that's right. airport specific. >> supervisor cohen: is it deputy chief? i think i gave you a promotion when i said chief. come on down, schmidt. >> i don't think the process is that easy, in my experience.

>> supervisor cohen: that's right. can you explain to me the distinction between the training -- between the specialized training that the airport officers receive versus those that are just on our streets? >> sure. so there's federal mandates that control all airports, and when officers arrive from the city, we put them through a 40-hour training to familiarize them with the federal regulations controlling the air field, the security versus the nonsecure side, movement between the two. they go through a badging process, and then, we -- once they finish that week-long training, then we deploy them with other officers so they can work through the different assignments, then after that, they work pretty much on their own. it's pretty much unit -- suo environment. >> supervisor cohen: what? >> suo, solo unit officer

environment. >> supervisor cohen: okay. i don't have anymore questions. i think supervisor yee has one. >> supervisor yee: thank you, chair cohen. my question is in regards to the employment opportunities. and this, traditionally, when people talk about employment opportunity, they often times leave out certain subsets of people, and maybe it's not true here, but i'll ask the question. i just had a hearing on the gaps and opportunities or lack of employment for seniors who are -- who want to reenter the workforce and also for people with disability. are you working with those two groups of population to see if we could help them? >> we are working with the disabled community. the seniors, i am not sure, supervisor. i will have to confirm that,

get outreach there. >> supervisor yee: yes. from the hearing, it seems like there's really more people that want to reenter the workforce because of their fixed income that's not making it manageable for them to live in the city, and they want to go back into the workforce. and many times, part time. >> thank you. we'll follow up on that. >> supervisor cohen: thank you. supervisor fewer? >> supervisor fewer: yes. thank you very much for your presentation. so can you -- just for clarification, going back to supervisor cohen's questions about the added police presence at the airport, what does the command staff look like in that overall structure that you're looking at in the next two years? 287 police officers, and what does the command staff look like? and also, isn't it true that there are police officers that are trained at our academy classes that are transferred to

the airport academy; that they don't have to go through a special academy that is just designed to do the airport, is that correct? >> you know, i'll answer the second question first, if i may. there is a seniority list that's established. that list is where we go to get all the officers, so there are no academy graduates that go directly from the police academy into the airport. it all comes off the seniority list. >> supervisor fewer: great. >> and there's quite a long list of that. >> supervisor fewer: so when you say you are funding two academy classes, then, you are saying that you are funded two academy classes for the whole of san francisco. and then, you will take recruits off of -- i mean, i would take people from the airport off of that seniority list, but everyone is thrown into the same sort of pot of employ -- police officers. and then, you say, we need 20 more, and you look off the seniority list, and you pick

off of that, is that correct? >> yes, that's correct. 50 officers that may go through the academy class, 50 officers come off that seniority list-- >> supervisor fewer: thank you. i think that clarifies it. and then, your command staff? >> command staff, we're looking at 12 captains -- sorry. three captains, 12 lieutenants. >> supervisor fewer: yeah, that shocked me. >> there's a total of 15 -- 16. >> supervisor fewer: 15 command staff folk snz. >> 16 command staff folks. >> supervisor fewer: really? >> down to lieutenant. >> supervisor fewer: that is huge. >> maybe... >> supervisor fewer: yeah, maybe the expert on police staffing. >> so the command staff would remain the same. there's currently a commander position, a deputy commander, and three captains.

the staff would see some growth in the lieutenant level and the sergeant level. >> supervisor fewer: so deputy chief, you say there's one commander, a deputy commander? >> yes. >> supervisor fewer: okay. let's go by hierarchy. what would be the growth? >> the growth would be to 12 lieutenants we currently have ten. >> 12 lieutenants, and how many sergeants? >> we would go to 41. >> supervisor fewer: so 41 sergeants. really, for the airport, you have that much management staff at just the airport? >> so the airport, the way it's organized is by three bureaus. so i, with the commander oversee an administration bureau, traffic bureau, and a patrol bureau, and each of those bureaus has a captain. and then, under each of those

captains are some lieutenants. the traffic bureau, for example, is different than the city. there's 184 police service aides that work in the traffic bureau. and then, there's roughly 27 sworn members who work in the traffic bureau, as well. that includes your motorcycle patrol enforcement, it includes the ground transportation unit, which is -- regulates -- with the airport's ground transportation unit, partners to regulate the vehicle for hire. and then, so -- >> supervisor fewer: vehicle for hire is. >> tnc's, ubers, lyfts. that industry and the impact on the airport road ways and the job of the police department. on the road ways of the airport, there's 800,000 tnc trips every month to the airport. that's a tremendous number of people coming on property that have to be -- that has to be

regulated to ensure they're following the rules of the road, that it's safe. and that's just the tnc's. there's also the limo drivers, the buses; you know, every other vehicle for hire has to be regulated. that's done by the traffic bureau at the airport. >> supervisor fewer: i find this fascinating since we have invested so much money into b.a.r.t. to the airport. this is fascinating. thank you very much, deputy chief. i appreciate that. >> okay. >> supervisor fewer: i have another question about the tnc's, and you talked about tnc management. have we ever discussed that we are able to have taxis only at airports, meaning that we wouldn't have tnc's, we'd just have taxi only lanes that have curb access to the airport. tnc's would not be allowed to have any curb access at the airport? are we able to do that, and have we ever discussed that? >> we are not able to do that, restrict lanes to taxi -- or to

nontnc. we have a taxi only curb. we can't restrict to only tnc operations. >> supervisor fewer: you can't make your curb space taxi stands? >> the taxi -- they actually have taxi stands at the airport, so there is in the lower level, they have a median. >> supervisor fewer: yeah. so i think what i'm saying is you can't reserve all your curb space to be taxi stands? >> no. we provide most of our curb space against the terminal is for the public, and now the tnc is inter-mingled with the public for all the access. >> supervisor fewer: yeah, it's a mess from when i go there. you say you're partnering with companies for internships. how many of those internships lead to jobs at the airport. >> i can speak to the engineering architecture programs. i would say a large percentage

of those. the other one, i couldn't give you a range. i'm not certain. i'll report back to you on that. >> supervisor fewer: okay. and then, the other one, i see your revenues have gone up and you have an increased budget for the next two years of 10%, 11%. as you're aware, prop j was passed in 1976 or '79 -- '76. it was in the state of emergency, you are able to contract out positions. and when i look over the positions, those are entry level approximapositions, and contracted out to companies. but we are no longer in a state of emergency as we see your budget is increasing, and probably due to your good fiscal management, and so we

were wondering, i was wondering if those positions that are currently contracted out through proposition j, if you have any plans to incorporate them into permanent civil service positions? >> you know, there -- i think we have about five contracts that are prop j contracts of different -- like air train and parking management and those. let me do a deep dive and see if those opportunities exist. >> supervisor fewer: that would be great. i just want to commend you on your local hire on your construction jobs. i think that is excellent. have you ever considered a local hire being a policy for airport hiring, not just construction jobs, but actually for the other jobs at the airport. as you know, the state of retail in san francisco is at a crisis level. i think that we are looking to put homeless people back into jobs, we are looking anywhere we can find for entry level positions that these job training programs through oewd

and hsa, and are you partnering with hsa or oewd to fill some of these positions. so are we looking for those positions to slot people into? and i think that the airport has such a good reputation, actually, of how they treat their employees, and the working conditions, i think would be excellent to integrate some of these people in. and after looking at the prop j jobs that are contracted out, most of them are entry level positions that those positions could be substituted for. >> we've got a good relationship with the oewd, so we'll reach out. >> supervisor fewer: thank you. >> if i could correct something i said about the uber and lyft, we do have an initiative that may -- first the pick ups, to move them into the central garage, and that would take them from the curb side, and eventually the drop off, so

we're trying to incentivize is with some premium pricing, but can he can't restrict their access. >> supervisor fewer: -- but we can't restrict their access. >> supervisor fewer: okay. thank you very much. >> supervisor cohen: thank you. supervise stefani? >> commissioner stefani: i was wondering, how do we compare with other airports in terms of police staffing? >> you know, the metrics we use are around officers per-100,000 passengers-type thing. and we are on -- we were on the low side, i think, of most -- a lot of airports are now trying to increase at the same time because of the vulnerability of airports, so you do see airports ramp will up police staffing, so right now, the metric doesn't align to what

the needs are. i think airports are trying to move up to protect those vulnerable spots. so when we're at that full staff, i will be able to measure i think what other airports have done, as well. but i'd be glad to give you a report of what we've done so far, actually. >> commissioner stefani: okay. that goes to my next question. how does the increased expansions and loads affect the officers? >> it's significant just because the amount of additional space to cover is an important aspect; the amount of activity and passengers that we're experiencing. our growth has just far outstripped what our projections were, and so that's put a lot of strain on our police force, as well. we believe this accommodates the growth that we'll be experience is in the next five years. >> commissioner stefani: are you experiencing the property crime epidemic in the airport garages, is that occurring there, as well. >> you know, we do get episodic

incidents like stealing of catalytic converters. there will be a period when that happens. not so much the break-ins, but we do get car thefts once in a while. >> commissioner stefani: and is that something police officers can help with? >> they will. >> commissioner stefani: okay. and one last question. do you have active shooter trainings for staff? >> we do for all and including all of our airlines and other partners. >> commissioner stefani: and is that something also that the police officers are involved with? >> they are. we just did our annual emergency exercise last -- well, i guess it was last october, and that was an active shooter full scale emergency exercise with all mutual assist in our law enforcement. >> commissioner stefani: thank you. >> supervisor cohen: supervisor sheehy? >> supervisor sheehy: so back to the tnc's, our favorite subject. so how are they -- you must charge them a fee, right?

>> we do. we currently charge the tnc's $3.80 for pick up and $3.80 perdrop off. >> supervisor sheehy: and how does that compare to the taxis? >> the taxis pay $5 total. >> supervisor sheehy: and how is that added up? >> we factor in all of the curb side costs, the ground transportation costs as well as maintenance of all of the facilities that they utilize, and then we come up with a costal indication methodology. >> supervisor sheehy: do you add in the police supervisor ability? >> yes, i believe we started factoring in those costs. >> and do the tnc's require a permit or can they just come?

>> the tnc require a permit, and we issue those permits. >> supervisor sheehy: so are we sure we're covering all the costs associated with having lyft and uber at the airport? >> you know, we've challenged the team to look at all of the maintenance costs and be not creative, but be reasonable about what the impact is because it has become so overwhelming. to me, the next -- i think we've done everything to capture their impact in terms of operating end cap and maintenance costs. the next question is around capital costs and is there a means of having them start -- how do we think about them being part of the capital recovery, like rental cars are, but that is not allocated -- legislated to allow for that. >> supervisor sheehy: do they park on airport property? do they cue? >> we have a tnc lot at the south end of the airport with about 200 spaces, and then, they are dispatched from there to the terminal road ways?

>> supervisor sheehy: and how much do they pay for that? >> there is no fee for staging. >> supervisor sheehy: how come? >> because it is recovered with the passenger pick up and drop-off fee. they get dispatched, and then, when they pick up, they pay that $3.80. >> supervisor sheehy: and then, there is a lot for cabs. >> the first floor of the garage is pretty much dedicated to cab staging. >> supervisor sheehy: and do they pay a fee for that. >> that is -- the $5 fee is intended operation signal cost >> supervisor sheehy: so why is there a delta, $5 for taxis versus $3.80 for tnc's? >> volume. tnc's are now 75% of total ground transportation, so that proportion of movement is far greater than the taxi movements, which are about 10%, so you look at it on a number of trips basis, that's

allocated, and some of the transcripts don't get allocated as far as what they use of curb side management or policing of the different areas. >> supervisor sheehy: do you look at the impact on the road surfaces? or do you maintain -- isn't the airport responsible for paving, maintaining the roads 1234. >> -- roads? >> we do, and we do incorporate that into our models? >> supervisor sheehy: well, you do, but you charge $5 for the taxis when 75% is the tnc's. that's got to be a lot of wear and tear. >> it is, but they -- it's a total of 7.60 for 2 nc. what we're looking at is the premium curb side model fee, too, to incentivize them to use the garage. >> supervisor sheehy: any way we can capture -- obviously, our taxi industry is diing, and

that's probably the one place we can save them. again, not to discriminate unnecessarily, but there is kind of an issue here when you think about that the taxi drivers have paid the city $200,000 for medallions, and we're kind of -- i think that they're -- i think perhaps -- and i don't want to go through this all -- use all this time because i think we have a long hearing, but maybe there should be a discussion between mta and the airport because we have collected with one branch of city government $200,000 for me tall dme -- medallions for taxis. they're basically going bankrupt from these medallions. i think since we've saddled them with this debt that we don't saddle with tnc's for. the one piece of property we do own where they could get an

advantage in picking up and drop off is at the airport. and while they have small advantage, if we can make that better, maybe that's a place, for instance, where we can just waive their fees altogether in order to help them some way mitigate -- because we basically have taken these folks, and we're driving them out of their homes and we're making them bankrupt. we know in new york city, we had suicides of taxi drivers that were stuck with medallions that we couldn't afford. but that's a longer -- that's another discussion. i think -- yeah, that's it for my question, though i think that somebody's looking at a taxi measure around tnc. maybe they should find a way to -- to look into that. >> supervisor cohen: okay. i called a hearing with the tnc and the taxi.

we'll hear that in a few minutes. i think i'm concerned over yaul with the number of officers that you're -- overall the number of officers that you're requesting, so you should be prepared to did he fend that and prepare some analysis around that the next time you come back. but we don't need to get into it today. i appreciate your high level analysis of the department. keep doing a good job. >> sure. >> supervisor cohen: next, i'd like to bring up the port of san francisco. all right. the next department presenting is the port of san francisco. elaine forbes is the executive director. they've got a total budget of

174 million, of which 9.8 million is general fund. >> good morning chair cohen, members of the committee. >> supervisor cohen: good morning. >> elaine forbes, executive director of the port. i'm joined by my staff, and we're here of course to present the proposed two-year budget. the port is on a two-year budget cycle as other enterprise departments are. our two-year budget is really geared to support our strategic plan and it does so in a -- in a variety of areas that the port commission and part a-- port are trying to advantage with our waterfront. first, we are working closely to expand our water system. the network is growing substantially, and as you know, the city needs to increase this. in the area of sustainability

as the new director 1.5 years ago, he consolidated the planning and environment -- i consolidated the planning and environment group to continue to excel our sustainability program in resiliency. of course we're working on the san francisco seawall earthquake program, and this is to address our dual threats of earthquake and flooding in the city. we encourage economic activity for our waterfront, to keep our enterprise stable. we have consolidated a development and real estate under one division, which is to strengthen our asset management and strategic development and leasing for port properties across the waterfront. and lastly, the budget is critical to the renewal and strategic stability of our waterfront plan.

we have major strategic plans that will help us evolve the waterfront to meet the needs of today and tomorrow, we'll also see there's a lot of financial prudence of our budget. we are trying to allocate more and more of our budget to capital, which is important that we keep our facilities in a good state of repair. 55% in year one is in general, and 35% in the second budget year. >> supervisor cohen: can you just do me a favor and change the slide? >> i'm still on that slide. i'm sorry. i'm going on and on about the strategic plan, but i'm moving now. thank you, chair cohen. in terms of our revenue, you'll see that our revenue budget is at 188, which is down--is up

38.2 from the prior year. we are trying to control our expenditures. we do have a lot of work at the port, so we're definitely targeting where we spend our money. and again, to capital, which is our key priority. so in terms of our revenue, we see we are growing in all regards except to parking, and i think this is due to trends of people moving to more and more to modes besides the car. we do see some softening at the rate of which we're growing which could be an indication of a rate stablization or even a slow down. we have -- real estate is driving our growth. real estate drives our portfolio overall. we have some risks in our maritime budget as it relates to the shipyard, and we really

want to secure a new operator who can successfully run that facility. so in terms of what's happening in our budget expenses, you will see that we've grown 47% between '14-'15 and the proposed budget year '19-'20, and that growth shows capital. i will note that personnel costs have increased by 10 million since 14-15, and that's primarily from keeping what we have in staffing. so staffing changes, we have a total of 3.5 new fte, but that's completely offset with atrition. we have 12 now project funded positions, and 31 new substitutions and reassignments. those substitutions and reassignments were all director desire to organize the operation in a way to achieve

our maximum results, and that's really the aalignment of the planning and environment staff that you just described and real estate and environment under one director. we also haven't grown our staff very much but we've grown our capital spending, so we're growing a new pmo office. we have 12 off budget positions in total better detailed on this slide. i've been talking of how well we're doing on spending on capital, but this chart is a revealing diagram as it shows we really have a long way to go to meet the port's needs. our enterprise simply does not produce enough revenue to come up with our capital backlog and maintenance requirements, so i'm showing you where we are at 18-19, and the gap between where we need to be annually to not be adding to our backlog.

i'd like to speak a bit about the project management office because it's one of the major initiatives we have on the personnel side. we hired a consultant to look at how we're delivering capital. our engineering staff has stayed the same essentially for many decades, but we're trying to do so much more for the waterfront, and the consultant strongly recommended that we have a project management office that would really focus on improved coordination and management, data, contracting, data collection, so we can make trade off decisions and keep our capital budgets really going on track, so we're going to follow that consultant's recommendation with your support and form a pmo office at the port of san francisco. >> supervisor cohen: and this new office, you have space for them? >> we do. we'll -- we'll howuse them in pier one, in the engineering division.

they'll be very tightly integrated in the engineering division, and it's a four -- four-fte proposal -- i'm sorry, it's a five fte proposal, four project managers and one analyst. >> supervisor cohen: i'm sorry. the proposal says six fte's. >> for the pmo office, it's five new fte's -- yes, it is. i'm sorry if we have a typo there. it's a five fte office. five project managers and one analyst. we've -- for the project, what's been happening is we have been so prudent at controlling our operating budget and giving more money to capital that we have had more

ability to improve our waterfront and tackle our backlog, but we haven't had the staffing to deliver the projects. so we've been accumulating a balance of cash sitting in these projects, waiting for delivery, and we haven't had the staffing to do the permitting, the ceqa, and the project management, so we really needed to find a way to get the capital dollars that we've been able to identify into improvements on the waterfront, and this pmo office will be paid for from my capital budget. >> that sounds like patricioni budget. >> it is. but i think it will be a well funded budget, but we will be analyzing what we do and we will have good data to show if this is a success. the other initiative i'd like to speak with you about is our historic piers in the

embarcadero historic district. we have 13 out of 20 of those historic peers that have not been upgraded and need substantial capital investment. they're not meeting their best place, their economic potential for the city, and we're not inviting the public in because they're in bad shape. some of them are red tagged, some of them are used for parking, some of theme are used for storage. we've gone through a two year community plan for upgrading them, and the public has said we want to see a future for these peers. they're one of a kind, they're 100 years old. we're putting it out for rfi for small and large tenants to say what public serving operations do you have that you would like to see active on the waterfront, whether that be parks and recreation, arts and

museums, once we have that information about who might want to come from local small businesses from around the city and the region, then, we'll be able to go out with rfp's for our historic district, so we're hoping to see some major investment in these piers and a new life for them. of course, you know about the seawall program. i will not go into it in detail. many of you have already been briefed, but of course our seawall was constructed over a century ago. it has seismic and sea level rise risks. we are working hard with all of you, with our state and federal partners, to plan for a project that provides a safer waterfront in the near term and to prepare for sea level rise in the long term. the budget includes funding for the seawall program to keep it going, and i'm very pleased to say working with the city, we have identified sources not in the bank yet, but identified sources for our first phase which will tackle life safety

issues. >> supervisor cohen: good. >> yes, chair cohen? >> supervisor cohen: i said that's good. >> okay. thank you. onward to the ferries, and other maritime improvements. i do want to let you know that we're working on the mission bay ferry landing, which is a critical -- it's a growing area that needs a transportation -- water transportation center. this mission bay ferry terminal will provide for 10,000 weekly passenger capacity, and this budget provides for continuation of that project. we also are working on a downtown ferry terminal expansion with weda. they have the funding for that, but that's in progress, and we're also working with the national park service to substantially improve the alcatraz parking experience for the public, and we are spending 5 million to improve the sub structure there. so lots of improvements coming to our waterfront to get people onto ferries for transportation

and enjoyment. i told you we do have some challenges at the waterfront. first and foremost is getting that shipyard back, up and running. we're working hard on that. we have under utilized facilities that are in a bad state of disrepair. you've seen from our budget we do not have our capacity to keep all of our facilities in a state of good repair, and it shows, but we're working in ways to bring in new investment. and then, of course, being on filled lands, we have seismic and flood risks that are substantial, and we are working with everyone in this room and beyond to see for a safer future for the city's edge. we have many upcoming opportunities. we've broken ground with forest city. mission rock has approvals. mission rock has many new developments. we're working with the southern

waterfront. there's more utilization that we can do to create new jobs for the community. we've started with a really robust auto i mport-export. we're working with our open space and parks network. we'll see major parks come in the near term, mission park, glenn cove park and pier 70 waterfront, needed open spaces in the dogpatch for the southern waterfront community. the port has really carefully taken the funds we have to advance our strategic plan and meet our needs in the most strategic way possible. as i've shown you, the port

does not have all of the funding that it needs to keep its facilities in a state of good repair, but we are doing the best we can to maintain. we have more work to do with the budget analysts, but we'll be coming back. >> supervisor cohen: yes. you will be coming back. i understand you've got approximately 300 full-time employees, and you're looking to get 3.5 new employees? >> that's the -- that's the net. >> supervisor cohen: okay. >> so we have some project funded positions, let me go back to that. >> supervisor cohen: and a capital budget of $60 million. >> yes. our capital is said between what we save and what we spend for the next year, so the capital budget is 26.8 in budget year and 13.5 in 19-20 -- oh, i'm sorry. it's more than that. could you...

>> good afternoon -- good morning, supervisors. so the port's capital budget in the next fiscal year is approximately 50 million, 29 million the year after? so for the two years combined, we're looking at about $79 million. >> supervisor cohen: okay. thank you. >> and actually on the fte count, the port did abide by the mayor's office request not to increase our overall fte count, so in our operating budget, we have net zero increase. we did add some project funded positions, but those positions are technically off budget? they are supported by project funding, and they do not increase our budgeted fte's. >> supervisor cohen: okay. so that means that the four fte's that you spoke of in the presentation and the one analyst are going to be coming from this special designation of project funding. >> yes. >> supervisor cohen: and what

funds the projects? where's the project funding coming from? >> it's coming from the port's funding. >> supervisor cohen: i want to talk about regional measure three. if it passes, the port's going to see a little over 24.7 million to support the seawall lot. >> it would be for mission bay ferry landing, and we are hoping that would be the result. we've been in conversation with weda and working with them to deliver that mission bay ferry landing project. >> supervisor cohen: now, let me ask, is this request of money already built into the legislation? i don't believe so, so once it it passes, how do we know that's what our allocation will be? >> so we're working closy with weda. the process is weda goes through an exercise with their board. they control the ferry money, and they look to see what are the best ways to spend the regional three moneys.

the mission bay funding is the strongest ferry box funding that weda has in its strategic plan, so we believe it's going to be a very strong competitor, and they're well aware that we're looking to the source to complete the construction. we're turning this facility over to weda to run. >> supervisor cohen: i see. they have a vested interest in partnering with us in this endeavor. >> yes, they do. >> supervisor cohen: and then, the seawall ballot initiative, i guess placing a $425 million general obligation fund, that's going to be this november in 2018? >> yes, and you'll be seeing that legislation come second week of june. >> supervisor cohen: sure. i'll be looking for it. >> all right. >> supervisor cohen: all right. i don't have any other questions? supervisor fewer? >> supervisor fewer: yes, thank you very much miss forbes. i have just some questions about your prop j positions that we just approved some prop j positions at the last budget

meeting. but again, i -- the wording of prop j passed in 1976 was in emergency circumstances, and it seems as though you are not in an emergency circumstance. so i know these positions have been contracted out for many, many years now. do you have any plans on incorporating them into permanent positions that are not subcontracted out by third party companies. >> if i may, we have two prop j contracts. one you just approved was for our janitorial services. >> supervisor fewer: and one for security. >> i want to speak about the janitorial, because we're going out for that contract now, and we're going to be using microlbe's. because of the size of this contract, we can specify we want microlbe's, so i think we may be achieving a very good